By now, most dairy farmers have cashed and spent their share of the $290 million economic assistance funds sent to them courtesy of Uncle Sam. In fact, that 32-cents-a-hundredweight was probably “swallowed whole” by the first feed delivery truck on the first morning after the payment arrived.
For news media and consumers not familiar with the dairy business, that $290 million sounds like another huge pile of cash dumped in agriculture’s big trough. But the reality is that the amount each dairy farm received wouldn’t begin to pay one day’s feed bill – let alone one family’s monthly grocery bill.
In my 39 years as an agricultural journalist, I’ve never met a single farmer who would prefer a government hand-out over a decent market price. I’d probably have a stroke if I met one.
Yes, farm-gate milk prices have risen in recent months and are expected to come back to break-even levels by mid-year. (See the Northeast Economic Outlook predictions in the soon-to-arrive February issue of American Agriculturist.)
Broken system still not fixed
Even well-managed dairies will have trouble recouping the losses incurred over the last year. Those that do will very likely have other income streams – energy, compost, value-added – to compensate for still-meager milk profitability.
So we are still setting the stage for larger dairy operations and the decline of smaller ones. And now, the U.S. Environmental Protection Agency has served notice that it’s going to become even more heavy-handed on air and water quality issues, targeting larger livestock operations. That means higher costs of producing meat and milk.
Ironically, huge milk margins still exist on the retail and distribution side of the dairy industry. And the profiteers have shown no real or substantial cooperative spirit in fixing the current system – not as long as they can import products masquerading as domestically produced dairy products.
That’s why one vital step is to bring milk and dairy products under the Country of Origin Labeling rules. This issue will separate who really supports America’s dairy farmers and who sides with the “fat cats”.
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